UK credit cards 'outnumber people

The UK is the only country in Europe where there are more issued credit cards than people, according to a survey published today.

The number of credit cards in the UK is double the European average. The total number of plastic cards is equivalent to two cards for every man, woman and child, the figures from market analyst Datamonitor showed.

In 2003, 67m credit cards were in circulation in the UK, accounting for more than half of the credit cards in Europe and almost two-thirds of the total value of transactions.

The report's author, Kieran Hines said: "Consumers in the UK have grown extremely comfortable in making payments by card over recent years, and this is shown in the high and growing numbers of plastic cards in the market relative to its European neighbours."

At the end of 2003, there were 542m payment (credit, debit and charge) cards in western Europe and, of these, 134m were held in the UK. Germany is the second largest card market in Europe, since being overtaken by the UK in 2001.

Plastic card use varies across Europe. The German market has the highest number of debit cards and comparatively few "pay later" cards, while in France debit cards are uncommon in comparison to the number of "pay later" cards.

In both countries credit cards represent only a very small portion of the total "pay later" market compared with the UK, where it is a relatively even split between debit and credit cards. Consumers generally use debit cards for day-to-day payments and credit cards for less frequent, high value purchases.

The size and continued growth in the UK card market is due in no small part to recent growth in the credit card market, the report said. There were close to 66.8m credit cards in issue at the end of 2003, which means that the UK accounts for more than 55% of the 121m credit cards in the whole of western Europe.

The credit cards we are used to in the UK are not very popular in mainland Europe. While many consumers do hold plastic cards that have a "pay later" function, they often don't allow for long-term borrowing and must be settled in full at the end of each month.

"UK consumers are comfortable with the idea of card-based credit, but consumers in Europe are not. This is not to say that consumers in the UK borrow more heavily or are more indebted than their European counterparts, but that they prefer to borrow in a different way," said Mr Hines.